We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Broadcom and 4 Other Semiconductors Set to Outperform
Read MoreHide Full Article
The technology sector has been one of the brighter spots for investors so far this year. We note that the Technology Select Sector SPDR ETF (XLK - Free Report) has gained 10.4% year to date, which is much better than S&P 500’s increase of 6.5%. The technology heavy Nasdaq has gained 9.6% during the year-to-date timeframe.
The preference for technology space is primarily driven by its dynamic nature. It is expected to grow faster than ever before on the back of emerging technologies like Internet of Things (IoT), Big Data, 5G connectivity, Autonomous Car and the ubiquitous Cloud Computing. Therefore, if you invest right, you can reap the benefits over time.
Among the 11-sub industries in the broader technology sector, the semiconductor industry has been one of the outperformers so far this year. We note that iShares PHLX Semiconductor ETF (SOXX - Free Report) has gained 11% year-to-date, driven by strong earnings results from well-known names like Broadcom (AVGO - Free Report) , NVIDIA (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) .
In fact, the forecast for the upcoming first quarter is significantly positive. As per the latest Earnings Trend, the technology sector is poised to grow 10.2% from the prior comparable period. We believe that increasing demand for high computational chips that are the building blocks of cloud computing, big data and artificial intelligence (AI) will drive growth going ahead.
Why Broadcom?
Broadcom has been one of the most consistent performers in the semiconductor industry. Shares have increased almost 27% on a year-to-date basis, a much better performance than NVIDIA and Intel, which are down 3.9% and 3.2%, respectively. Further, the company is outperforming AMD stock, which is up 23.3% year to date.
The outperformance is primarily owing to Broadcom’s robust revenue growth and expanding margins. We note that the company has posted positive earnings surprise of 5.95% in the trailing four quarters. (Read More: Broadcom Beats on Q1 Earnings & Revenues; Shares Up)
Per Bloomberg “The company’s earnings are an indicator of demand across the mobile phone, wireless and fixed-line and computer industries.” With one of the most diversified communications platforms in the industry, Broadcom remains well poised for healthy long-term growth. Over the next 3-5 years, the company’s earnings are anticipated to increase at 13.60% rate.
Broadcom has also witnessed significant earnings estimate revision in the last 30 days. The EPS estimate for the current year increased 6.8% (82 cents) to $12.91 per share over the same period.
Here we have picked four other stocks from the industry that have performed more-or-less similar to the company and also have the favorable combination of a VGM score of “A” or “B” and Zacks Rank #1 or 2 (Buy).
Applied Optoelectronics Inc. (AAOI - Free Report) sports a VGM score of “A” and a Zacks Rank #1. Current year EPS estimate has soared 76% to $3.14 in the last 30 days.
Year-to-date Return : 99.1%
Average four-quarter Surprise: 116.49%
Long-term EPS Growth Estimate: 18.33%
Skyworks Solutions (SWKS - Free Report) has a VGM score of “A” and a Zacks Rank #2. In the last 30 days, current year EPS estimate has remained steady at $5.82 per share.
Year-to-date Return : 31.4%
Average four-quarter Surprise: 2.65%
Long-term EPS Growth Estimate: 14.44%
AXT Inc. (AXTI - Free Report) has a VGM score of “B” and a Zacks Rank #2. In the last 30 days, the company’s fiscal 2017 EPS estimates have increased a penny to 21 cents per share.
Year-to-date Return : 39.6%
Average four-quarter Surprise: 118.75%
Long-term EPS Growth Estimate: 17.50%
Pixelworks Inc. (PXLW - Free Report) has a VGM score of “B” and a Zacks Rank #2. Current year EPS estimate has advanced a dime to 12 cents per share in the last 30 days.
Year-to-date Return : 63.5%
Average four-quarter Surprise: 59.36%
Long-term EPS Growth Estimate: 20.00%
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Broadcom and 4 Other Semiconductors Set to Outperform
The technology sector has been one of the brighter spots for investors so far this year. We note that the Technology Select Sector SPDR ETF (XLK - Free Report) has gained 10.4% year to date, which is much better than S&P 500’s increase of 6.5%. The technology heavy Nasdaq has gained 9.6% during the year-to-date timeframe.
The preference for technology space is primarily driven by its dynamic nature. It is expected to grow faster than ever before on the back of emerging technologies like Internet of Things (IoT), Big Data, 5G connectivity, Autonomous Car and the ubiquitous Cloud Computing. Therefore, if you invest right, you can reap the benefits over time.
Among the 11-sub industries in the broader technology sector, the semiconductor industry has been one of the outperformers so far this year. We note that iShares PHLX Semiconductor ETF (SOXX - Free Report) has gained 11% year-to-date, driven by strong earnings results from well-known names like Broadcom (AVGO - Free Report) , NVIDIA (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) .
In fact, the forecast for the upcoming first quarter is significantly positive. As per the latest Earnings Trend, the technology sector is poised to grow 10.2% from the prior comparable period. We believe that increasing demand for high computational chips that are the building blocks of cloud computing, big data and artificial intelligence (AI) will drive growth going ahead.
Why Broadcom?
Broadcom has been one of the most consistent performers in the semiconductor industry. Shares have increased almost 27% on a year-to-date basis, a much better performance than NVIDIA and Intel, which are down 3.9% and 3.2%, respectively. Further, the company is outperforming AMD stock, which is up 23.3% year to date.
The outperformance is primarily owing to Broadcom’s robust revenue growth and expanding margins. We note that the company has posted positive earnings surprise of 5.95% in the trailing four quarters. (Read More: Broadcom Beats on Q1 Earnings & Revenues; Shares Up)
Per Bloomberg “The company’s earnings are an indicator of demand across the mobile phone, wireless and fixed-line and computer industries.” With one of the most diversified communications platforms in the industry, Broadcom remains well poised for healthy long-term growth. Over the next 3-5 years, the company’s earnings are anticipated to increase at 13.60% rate.
Broadcom has also witnessed significant earnings estimate revision in the last 30 days. The EPS estimate for the current year increased 6.8% (82 cents) to $12.91 per share over the same period.
4 Other Semiconductors Poised to Outperform
We note that Broadcom has a favorable combination of VGM Score of “B” and Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here we have picked four other stocks from the industry that have performed more-or-less similar to the company and also have the favorable combination of a VGM score of “A” or “B” and Zacks Rank #1 or 2 (Buy).
Applied Optoelectronics Inc. (AAOI - Free Report) sports a VGM score of “A” and a Zacks Rank #1. Current year EPS estimate has soared 76% to $3.14 in the last 30 days.
Skyworks Solutions (SWKS - Free Report) has a VGM score of “A” and a Zacks Rank #2. In the last 30 days, current year EPS estimate has remained steady at $5.82 per share.
AXT Inc. (AXTI - Free Report) has a VGM score of “B” and a Zacks Rank #2. In the last 30 days, the company’s fiscal 2017 EPS estimates have increased a penny to 21 cents per share.
Pixelworks Inc. (PXLW - Free Report) has a VGM score of “B” and a Zacks Rank #2. Current year EPS estimate has advanced a dime to 12 cents per share in the last 30 days.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>